Despite their name, customer loyalty programs are not really about instilling loyalty. A more accurate name might be customer data-gathering mechanisms (really rolls off the tongue, doesn’t it?). It may not sound pretty, but loyalty — meaning more shopper visits and increased spend — are essentially happy by-products of a successful program, not its primary goal.
One of the first retailers to recognize the value of gathering customer data that could be tied to individual shopper activity was Tesco
. Today, retailers can access multiple sources of customer data, from online activity and social networks to smartphone tracking. However, back in the 1990s when the Tesco Clubcard was born, the state-of-the-art method for data gathering was a loyalty program, or a loyalty scheme as they are called in the UK.
Tim Mason, one of the architects of the Clubcard as a former Tesco CMO, says the retailer always viewed the program as a way of gathering and analyzing customer data. “All good businesses are data-conscious and data-driven, and my view is that you manage what you measure,” said Mason. “It’s not until you start getting customer data that you start thinking about the implications of managing your customers.”
Mason, now CEO of Eagle Eye Solutions Group, and Miya Knights, the firm’s Head of Industry Insight, have co-authored a book, titled: Omnichannel Retail: How To Build Winning Stores In A Digital World
. In this exclusive Q&A, they reveal:
• The role that cheaper data storage played in making the Tesco Clubcard program work;
• How Clubcard “mailing weekends” became the 1990s ancestors of Prime Day and Singles Day;
• The new parameters of the retailer-customer “loyalty contract”; and
• Why retailers must extend their customer data insights into the store environment via mobile technology
Read the exclusive Q&A with Retail TouchPoints here